Mods please move this if not in the right category, might be worth a pin somewhere.
Please review new Toyota lease buyout policy, seems like TFS is now charging a markup to all dealers when purchasing leased vehicles prior to maturity. This was provided to us by a Toyota store and is a internal email.
FSB 2023-RMKT-027 Dealer Direct, Pre-Grounding Market-Based Price Estimate .pdf (149.6 KB)
Time to ask for my seqouia deposit back 
impressive since this is the response Toyota is probably looking for with this policy change
How would this apply for 3rd party buyouts, seems like the document is targeted for Toyota dealerships?
Is it though? If their intention was to only stop flippers the restrictions would be for first six months, much like what gm does with Z06 warranty. This is going to affect MUCH larger set of owners.
Spoke w one GM and he said it’s only vehicles that are grounded which shouldn’t affect sales to non toyota dealers.
At least this is what he stated based on the document in its current form.
Nothing is said about third party buyouts but I’m sure “market pricing” is going to be quoted if the lease is before 30 days. A lot of confusion going in at the Toyota stores right now, I’m curious to see how this unfolds.
Totally agree
The only thing throwing me off is the “grounding” piece.
That said it’s only v1 of the document so I’m sure the end is near
It wouldn’t make sense to hurt toyota dealers chances of buying these cars out and no one else
It sounds more like a heads up to Toyota dealers vs cutting off 3rd party overnight.
We can only speculate for now. That said I’m sure this will toss a wrench in the gears of the big players ie Carvana/carmax if and when “market price” is applied to TFS buyouts.
@Bostoncarconcierge I believe “grounding” can be interpreted as “buying for inventory” from this document?
I’m sure you’re right!
From what I can read, they are making a distinction between “grounding” and “payoff”.
To LH dealers: Does Toyota have to “ground” a lease to buyout a car? Couldn’t they merely do a “payoff” as if they were buying a non-Toyota lease?
Right now, it reads as if Toyota looking to provide a tool to estimate pricing when actually “grounding” a lease. The option is still available to do either?
Thanks for the heads up!
Sounds like Toyota is trying to achieve 2 things
Lock in higher than normal APR so they are held to term.
Slowdown the inflow of used Toyota’s into there dealerships so new cars are sold. Which also slows down supply keeping prices higher.
In the FAQ section, it says:
Once a vehicle is grounded, the vehicle is considered returned by the lessee and end- of-lease processes are initiated. At that point, TFS is obligated to treat the vehicle as a lease return and will not be able to accommodate requests to reverse a grounding.
Q: Why is the payoff purchase option not available on Early-Term vehicles that are grounded?
A: Dealers can continue to purchase for payoff by remitting payoff funds through the payoff portal. The purchase option for a grounded Early-Term vehicle is limited to market-based price only to ensure accurate servicing of the lease agreement.
So as long as someone doesn’t “ground” or return the lease early, dealer can still buy the vehicle by remitting the payoff amount.
False alarm?
It’s tricky for now.
Non Toyota dealers can pay Toyota leases off as of now. And they wouldn’t see these options.
My advice is to proceed w caution if you’re taking a Toyota lease for flipping in the next few weeks until more unfolds.
Perfect timing for me to sign on a Taco to have for yard work in the next few months… thought this would hurt the higher end buys a lot more, worst case I’ll pay the tax and buy it out myself.
Thought we’d start to see some movement in the other direction with lenders.
Completely agree. I just sold one yesterday and am going to be bugging the dealer today to get the payoff sent in asap.
It is clearly obvious what the intention is since it is stated:
“Dealers are encouraged to use this new functionality to help assess whether it is more
beneficial to ground the vehicle or simply pay the vehicle off without initiating the
grounding process”
If MBP is less, then you ground the vehicle. If it is more, then you buy it for the payoff amount.
Correct. Confirmed with my guy at a dealer (who reached out to his TFS rep), this doesn’t change Toyota or 3rd party dealer buyouts. Just removes the option after the the vehicle is grounded to buy at customer based buyout.
A Chevy dealer ( that I am trying to sell my leased Lexus) is telling me the following:
“If you car is currently a lease, toyota will not allow dealers to buy out your vehicle. You need to call your lender for more details on selling your car.”
I don’t think this is an issue right now with TFS/LFS. Is that correct? Is the internet manager not informed or what?